While there is an urgent need to address the problems in the banking system, the minister's announcement on budget day about the establishment of NAMA has raised a number of questions that require careful consideration.

The types of loans that have been spoken about in relation to NAMA vary But the use of terms such as 'toxic debt', previously applied to delinquent securitised mortgage assets linked to sub-prime lending in the US, is entirely misleading.

While clearly some loans have run into difficulty because of the sharp reversal in our economic fortunes, the overwhelming majority of loans relate to sound, economically viable projects that will be brought to fruition in line with the pick up in the economy.

It also appears that loans related to very successful retail, commercial, industrial, residential and mix-use developments will also be transferred.

From the point of view of bank balance sheets the logic behind transferring such loans is unclear.

In addition, while the tendency thus far has been to apply a one-size-fits-all description to the borrowers involved in these loans, in reality there is a clear distinction between the professional property development companies represented by the Construction Industry Federation and the groups of property speculators that became active at the height of the market in 2005 and 2006.

Managing loans is one thing ,developing and managing property is altogether different.

In cases where the original borrower has a demonstrable track record in property development they will invariably prove to be the best placed (and most motivated) to manage the successful work out of the projects.

As Murphy's Law would have it, however, a sizeable proportion of the land and property that changed hands at the peak of the market in 2005 and 2006, and which is now considered to be the most impaired, was purchased by individuals and consortia (often groups of solicitors, barristers, accountants and bankers) with no history of building or delivering projects.

Property speculators operated by selling on or 'flipping' the land/property as quickly as possible, generally to more experienced property developersto complete the project.

However, many speculators chose or were advised poorly. In such instances, NAMA may have no option but to incentivise more experienced developers to get involved through joint venture or other partnership arrangements.

The issue of working capital is extremely important. Put at its simplest, there will be no work out of assets until working capital is made available.

NAMA's ability to inject capital must be clearly provided for in the legislation.

The strong commercial approach is needed to avoid a situation whereby foreign venture capitalist funds buy prime Irish land and properties at prices well below their true economic value with a view to benefiting, and exporting these benefits abroad, at the expense of the economy and taxpayers from future uplifts in the market.

Even if NAMA is charged with a commercial remit, and is given the resources and time it will require to achieve the best work out of projects, a number of question marks remain.

The most important of these relates to the future of property development in Ireland. By centralising all decision making, including lending policy, in one institution of the state, there is a risk that the operation of NAMA could undermine the normal workings of the property markets and with it the jobs, tax revenues and economic activity that flow from them. The implications for the economy need to be considered. Property development is an essential element of any functioning economy. As it is, the property market has been in hiatus since the minister's announcement on 7 April.

The longer this situation is allowed to continue the worse it is for everybody. Disruptions to the orderly workings of the property market will, in short, significantly prolong the duration of Ireland's economic downturn.

The ultimate structure and day-to-day operations of NAMA are also clearly extremely important matters for consideration. Engagement between the property development industry, the banks and the state is vital to ensure that projects are worked through to a successful completion and that normalised market conditions can return, which is the best possible way of protecting the longer-term interests of the economy.

Tom Parlon is director general of the Construction Industry Federation, the national representative body for all sectors of Ireland's construction industry